Is It Time To Reconsider Check Point Software (CHKP) After Its Steady Five-year Share Price Rise?

If you’re wondering whether Check Point Software Technologies is fairly priced or offers value at current levels, read this article to find out what the numbers really say about the stock.
The share price recently closed at US$188.17, with returns of 0.5% over 30 days, 3.9% year-to-date, 2.6% over 1 year, 42.6% over 3 years and 47.4% over 5 years, which may influence how you think about its growth potential and risk profile.
Recent news surrounding Check Point focuses on its position in cybersecurity and how investors assess its role in securing networks and data, which helps determine its current stock price. This context is important because industry sentiment can influence how the market prices stocks, even when company fundamentals are relatively stable.
In Simply Wall St’s valuation checks, Check Point Software Technologies scores a 4 out of 6, with one point added for each test where the stock appears undervalued. We’ll look at how different valuation methods target that score before ending with a more holistic way to think about its valuation. Check Point Software Technologies scores only 4/6 on our rating checks. See what other warning signs we found in the full valuation overview.

Find out why Check Point Software Technologies’ 2.6% return over the past year lags its peers.

A Discounted Cash Flow model forecasts a company’s future cash flows and then discounts them back to today to estimate what the company might be worth today.

For Check Point Software Technologies, the model used is a 2-phase free cash flow to equity approach, based on cash flow projections. The company’s trailing twelve-month free cash flow is approximately $1.14 billion. Analysts and extrapolated estimates suggest free cash flow will reach $1.49 billion by 2030, with interim annual projections between 2026 and 2035 backdated to today.

When Simply Wall St adds up these discounted cash flows, the estimated intrinsic value comes to approximately $165.43 per share. Against the recent share price of $188.17, the DCF implies the stock is about 13.7% more expensive than this intrinsic value estimate, suggesting it is overvalued on this model alone.

Result: EXCESS VALUE

Our Discounted Cash Flow (DCF) analysis shows that Check Point Software Technologies may be overvalued by 13.7%. Discover 884 undervalued stocks or create your own screener to find better value opportunities.

CHKP discounted cash flow as of January 2026

To learn more about how we arrive at this fair value for Check Point Software Technologies, visit the Valuation section of our company report.

For a profitable company like Check Point Software Technologies, the price-to-earnings ratio is a useful way to relate the amount you pay for the stock to the revenue it currently generates. This allows you to see how many dollars investors are willing to pay for one dollar of income today.

What counts as a “normal” price-to-earnings ratio partly reflects how the market views a company’s growth potential and growth risk. Higher expected growth or lower perceived risk may justify a higher price-to-earnings ratio, while lower growth or higher risk typically comes with a lower multiple. Context is therefore important when you compare price-earnings ratios.

Check Point’s current price-to-earnings ratio is approximately 20.0x. That’s below the software industry’s average price-to-earnings ratio of about 32.9x and below the peer group average of about 29.6x. Simply Wall St’s ‘Fair Ratio’ for Check Point is 26.1x, which is the view of what the price-to-earnings ratio ‘should be’ given factors such as earnings growth, profit margins, sector, market capitalization and company-specific risks. This Fair Ratio can be more useful than a simple peer or industry comparison because it adjusts for those company characteristics rather than assuming all companies earn the same multiple. Because the true price-to-earnings ratio of 20.0x is below the Fair Ratio of 26.1x, the stock appears undervalued on this metric.

Result: UNDERVALUE

NasdaqGS:CHKP price/earnings ratio as of January 2026

P/E ratios tell one story, but what if the real opportunities lie elsewhere? Discover 1,440 companies where insiders are betting on explosive growth.

Earlier we mentioned that there is an even better way to understand valuation. On Simply Wall St you can use Narratives, where you tell the story behind your numbers by linking your view of Check Point Software Technologies’ future revenues, earnings and margins to a financial forecast and fair value. You can then compare that fair value to the current price to help decide how you feel about the investment, all within a simple tool on the Community page that updates as new revenue or news comes in. For example, one Check Point Narrative could lean closer to the higher fair value region of around $285 as it expects stronger adoption of AI security and resilient margins. Another could be closer to the bottom of the dollar, around $173, as it puts more weight on competition, margin pressure and execution risks.

Do you think there is more to the story for Check Point Software Technologies? Check out our community to see what others are saying!

This article from Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. We aim to provide you with targeted, long-term analysis based on fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or quality material. Simply Wall St has no positions in the stocks mentioned.

Companies discussed in this article include CHKP.

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